Can I Take Out Money Out of My Life Insurance Policy?

Can I take out money out of my life insurance policy?

Life insurance policies offer more than a financial cushion to you and your dependents from the uncertainties of life.

Insurance policies like ULIPs allow you to make partial withdrawals once the mandatory 5-year lock-in period is over.

However, you should be careful while making withdrawals to make sure that the policy doesn’t lapse.

Can I take out money from all life insurance policies?

Well, if you have an endowment or money back policy and have paid premiums for at least 3 years, your policy acquires a surrender value.

You can pledge your endowment or money back policy as a collateral for a loan.

You need to find out from your insurer about the various terms and conditions attached while pledging your them for a loan.

Can I use a term insurance policy for a loan?

No, a term insurance policy can’t be used for a loan.

Term policies are pure protection plans which pay a lump sum in case of death of the policyholder during the policy term.

They don’t have maturity benefits and a surrender value. Hence, you can’t use a term insurance policy for availing a loan.